Correlation Between Busan Industrial and Daebo Magnetic
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Daebo Magnetic at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Busan Industrial and Daebo Magnetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Industrial Co and Daebo Magnetic CoLtd, you can compare the effects of market volatilities on Busan Industrial and Daebo Magnetic and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Busan Industrial with a short position of Daebo Magnetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Daebo Magnetic.
Diversification Opportunities for Busan Industrial and Daebo Magnetic
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Busan and Daebo is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Daebo Magnetic CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daebo Magnetic CoLtd and Busan Industrial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Busan Industrial Co are associated (or correlated) with Daebo Magnetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daebo Magnetic CoLtd has no effect on the direction of Busan Industrial i.e., Busan Industrial and Daebo Magnetic go up and down completely randomly.
Pair Corralation between Busan Industrial and Daebo Magnetic
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 0.86 times more return on investment than Daebo Magnetic. However, Busan Industrial Co is 1.16 times less risky than Daebo Magnetic. It trades about 0.02 of its potential returns per unit of risk. Daebo Magnetic CoLtd is currently generating about -0.08 per unit of risk. If you would invest 7,474,842 in Busan Industrial Co on September 14, 2024 and sell it today you would earn a total of 175,158 from holding Busan Industrial Co or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Daebo Magnetic CoLtd
Performance |
| Timeline |
| Busan Industrial |
| Daebo Magnetic CoLtd |
Busan Industrial and Daebo Magnetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Daebo Magnetic
The main advantage of trading using opposite Busan Industrial and Daebo Magnetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Daebo Magnetic can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Daebo Magnetic will offset losses from the drop in Daebo Magnetic's long position.| Busan Industrial vs. Samsung Electronics Co | Busan Industrial vs. Samsung Electronics Co | Busan Industrial vs. SK Hynix | Busan Industrial vs. POSCO Holdings |
| Daebo Magnetic vs. Moonbae Steel | Daebo Magnetic vs. Dongbu Steel Co | Daebo Magnetic vs. Foodnamoo | Daebo Magnetic vs. Dong A Steel Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Correlations Find global opportunities by holding instruments from different markets |